FIVE THINGS: MARKET ROUTS

1 You thought this week was bad?

Sure, declines on the Toronto Stock Exchange of 6.93 per cent on Monday and 6.95 per cent on Thursday weren't much fun. They were the fifth- and fourth-worst days in the history of Canada's benchmark bourse. But compared with past plunges, this wild week - final tally: down 10.9 per cent in five days - was not as severe as the worst sessions in stock market history. The No. 1 dark day is of course Black Monday - Oct. 19, 1987 - when the TSX hurtled 11.3 per cent lower. After recovering somewhat, it fell another 7.6 per cent the next Monday, the No. 3 decline in Canada.

The blame for the No. 2 drop belongs to a single company, Nortel Networks Corp., the telecommunications equipment maker that rode the technology bubble until it accounted for one-third of the whole TSX. On Oct. 25, 2000, the day after the first crack in Nortel's story emerged, the index fell 8.1 per cent.

None of that was as bad as Black Monday in the United States, when the benchmark Standard & Poor's 500 index lost a fifth of its value.

The only comparable plummet occurred in 1929, when the S&P 500 lost 12.3 per cent on the market's original Black Monday, Oct. 28, another 10.2 per cent the next day, and a further 9.9 per cent the following Wednesday, Nov. 6. The U.S. market eventually lost 89 per cent of its value by the depths of the Depression in 1932.

(The darkest Black Monday in Canada's past is likely Dec. 10, 1894, when Newfoundland, then a colony of Britain, saw two of its three banks shut down, leading to collapsing businesses, soaring unemployment and vanished savings.)

2 The pain doesn't

always last

Within two years of 1987's Black Monday, U.S. stocks had recouped all they had lost, setting the stage for the epic bull market of the 1990s. There was a one pothole on the way: The nine-month recession from July, 1990, to March, 1991, coincided with a Dow Jones decline and recovery. Later, the emerging-markets currency crisis in 1998 was quickly forgotten as the bull roared in 1999 to its 2000 highs.

3 But sometimes

it does

It took the TSX five years and four months to recoup what was lost after the Nortel-powered all-time high set in September, 2000, topping that mark on the first trading day of 2006.

4 Sometimes a long time can be very long

It took 25 years - until 1954 - for the Dow to recover from the Crash of '29. Today Japan is enduring a similarly sluggish recovery. The benchmark Nikkei peaked on Dec. 29, 1989, at 38,915.87, and almost two decades later it is still down more than 70 per cent at 10,938.14. And 8½ years after the Nasdaq reached its 2000 tech-bubble high, it remains mired 60 per cent below that apex.

5 Sometimes the pain just lingers

The long-term history of stock markets is mostly

marked by long booms, sharp declines and long periods of no advances. The period from 1968 to 1982 in the U.S. - 14 years - saw no gain. Stocks right now may be in the same kind of extended flat market. At yesterday's close of 10,803.35, the TSX was at a level it first reached in July, 2000, more than eight years ago.

It's worse in the United States, where the broader market as measured by the Wilshire 5000

closed yester-

day at a level

it first hit

in 1998.